SupremeSteelCorporationv.

NagkakaisangManggagawangSupremeIndependentUnion
Facts:
RespondentUnionfiledanoticeofstrikeonthegroundthatpetitionercorporationviolated
certainprovisionsoftheCBA.RespondentallegedelevenCBAviolationsstatedasfollows:
A.DenialtofouremployeesoftheCBAprovidedwageincrease
B.aContractingoutlabor
C.Failuretoprovideshuttleservice
D.Refusaltoanswerforthemedicalexpensesincurredbythreeemployees
E.Failuretocomplywiththetimeoffwithpayprovision
F.Visitors freeaccesstocompanypremises
G.Failuretocomplywithreportingtimeoffprevision
H.DismissalofDiosdadoMadayag
I.Denialofpaternityleavebenefittotwoemployees
J.Discriminationandharassment
K.NonimplementationofCOLAinWageOrderNos.RBIII10and11
RespondentcitedpetitionerscompliancewithWageOrderNosRBIII10andgrantofthe
mandatedP15.00costoflivingallowance(COLA)toallitsemployees.Petitioner,however,
stoppedimplementingittononminimumwageearnersonJuly24,2005.Itcontendedthatthis
violatesArticle100oftheLaborCodewhichprohibitsthediminutionofbenefitshadalready
enjoyedbytheworkersandthatsuchgrantofbenefitshadalreadyripenedintoacompanypractice.
PetitionerexplainedthattheCOLAprovidedunderWageOrderappliestominimumwage
earnersonlyandthatbyemployees.Afterrealizingitsmistake,itimplementedthesameacrossthe
boardortoallitsemployees.Afterrealizingitsmistake,itstoppedintegratingtheCOLAtothe
basicpayoftheworkerswhowereearningabovetheminimumwage.

NLRCsRuling:
Outof11issuesraised,8weredecidedinitsfavor;2(Denialofpaternityleavebenefitand
discriminationofunionmembers)weredecidedinfavorofpetitioner;whileissueinvisitorsfree
accesstocompanypremiseswasdeemedsettledduringthemandatoryconference.
CAsRuling
NLRCsRulingwereAffirmed.IntheissueofNonimplementationofCOLA,itpointed
outthattherewasnoambiguityordoubtastowhowerecoveredbythewageorder.Petitioner,
therefore,maynotinvokeerrorormistakeinextendingtheCOLAtoallemployeesandsuchact
canonlybeconstruedasasavoluntaryactonthepartoftheemployer.
Issue:W/NpetitionersshouldcontinuetoimplementCOLAtononminimumwageearners.
Held:

No.theSCdismissedtheclaimforimplementationofWageOrderNos.RBIII10and11to
theemployeeswhoarenotminimumwageearners.
Diminutionofbenefitsistheunilateralwithdrawalbytheemployerofbenefitsalready
enjoyedbytheemployees.Thereisdiminutionofbenefitswhenitisshownthat:
(1)thegrantorbenefitisfoundedonapolicyorhasripenedintoapracticeoveralongperiodof
time;
(2)thepracticeisconsistentanddeliberate;
(3)thepracticeisnotduetoerrorintheconstructionorapplicationofadoubtfulordifficult
questionoflaw;and
(4)thediminutionordiscontinuanceisdoneunilaterallybytheemployer.
Thefactthatthepracticeshouldhavebeenpracticedoveralongperiodoftime,whereasin
thiscase,implementationofCOLAonlylastedforlessthanayear.Additionally,itmustnothave
beenduetoerrorintheconstructionorapplicationofadoubtfulordifficultquestionoflaw.
Respondentfailedtoproverepetitiveconductthatmightconstituteevidenceofthepractice.

NetlinkComputerInc.v.EricDelmo
Facts:
OnNovember3,1991,NetlinkhiredDelmoasaccountmanagertaskedtocanvassand
sourceclientsandconvincethemtopurchasetheproductsandservicesofNetlink.Delmoworked
inthefieldmostofthetime.Heandhisfellowaccountmanagerswerenotrequiredtoaccomplish
timecardstorecordtheirpersonalpresenceintheofficeofNetlink.Hewasabletogeneratesales
worthP35,000,000.00,moreorless,fromwhichheearnedcommissionsamountingtoP993,558.89
andUS$7,588.30.Hethenrequestedpaymentofhiscommissions,butNetlinkrefusedandonly
gavehimpartialcashadvanceschargeabletohiscommissions.Inordertoforcehimtoresign,
Netlinkissuedseveralmemorandadetailinghissupposedinfractionsofthecompanysattendance
policy.Thereafter,Delmowasshockedwhenhewasrefusedentryintothecompanypremisesby
thesecurityguardpursuanttoamemorandumtothateffect.Hispersonalbelongingswerestill
insidethecompanypremisesandhesoughttheirreturntohim.ThisincidentpromptedDelmoto
fileacomplaintforillegaldismissal.
LaborArbiterruledthatDelmowasillegallyandunjustlydismissedbytherespondent.
However,uponappealtoNLRC,itruledthatthereisavalidandjustcausesfortheterminationof
Delmosemploymenthowever,therespondentcompanyfailedtoobserveproceduraldueprocess.
Inotherargumentsofthepetitioner,CAruledthatNettlingfailedtorefutebyevidencethat
DelmoisnotentitledtothecommissionspayableinUSdollars.Neitheristhereanyreasonthatthee
computationofcommissionsmustbebasedatthetimeofsale.
Issue:W/Nthepaymentofthecommissionsshouldbeindollars
Held:

Yes.SCaffirmedtherulingofCA.
Asageneralrule,allobligationsshallbepaidinPhilippinecurrency.However,contracting
partiesmaystipulatethatforeigncurrenciesmaybeusedforsettlingobligations.
TherewasnowrittencontractbetweenNetlinkandDelmostipulatingthatthelatters
commissionswouldbepaidinUSdollars.Theabsenceofthecontractualstipulation
notwithstanding,NetlinkwasstillliabletopayDelmoinUSdollarsbecausethepracticeofpaying
itssalesagentsinUSdollarsfortheirUSdollardenominatedsaleshadbecomeacompanypolicy.
Theprincipleofnondiminutionofbenefits,whichhasbeenincorporatedinArticle10013
oftheLaborCode,forbadeNetlinkfromunilaterallyreducing,diminishing,discontinuingor
eliminatingthepractice.Verily,thephrase"supplements,orotheremployeebenefits"inArticle100
isconstruedtomeanthecompensationandprivilegesreceivedbyanemployeeasidefromregular
salariesorwages.
WiththepaymentofUSdollarcommissionshavingripenedintoacompanypractice,there
isnowaythatthecommissionsduetoDelmoweretobepaidinUSdollarsortheirequivalentin
Philippinecurrencydeterminedatthetimeofthesales.Toruleotherwisewouldbetocausean
unjustdiminutionofthecommissionsdueandowingtoDelmo.
SupremeSteelCorporationv.NagkakaisangManggagawangSupremeIndependentUnion
Facts:
Respondent Union filed a notice of strike on the ground that petitioner corporation violated
certain provisions of the CBA. Respondent alleged eleven CBA violations stated as follows:
A. Denial to four employees of the CBA-provided wage increase
B. aContracting-out labor
C. Failure to provide shuttle service
D. Refusal to answer for the medical expenses incurred by three employees
E. Failure to comply with the time-off with pay provision
F. Visitors free access to company premises
G. Failure to comply with reporting time-off prevision
H. Dismissal of Diosdado Madayag
I. Denial of paternity leave benefit to two employees
J. Discrimination and harassment
K. Non-implementation of COLA in Wage Order Nos. RBIII-10 and 11
Respondent cited petitioners compliance with Wage Order Nos RBIII-10 and grant of the
mandated P15.00 cost of living allowance (COLA) to all its employees. Petitioner, however,
stopped implementing it to non-minimum wage earners on July 24, 2005. It contended that this
violates Article 100 of the Labor Code which prohibits the diminution of benefits had already
enjoyed by the workers and that such grant of benefits had already ripened into a company practice.
Petitioner explained that the COLA provided under Wage Order applies to minimum wage
earners only and that by employees. After realizing its mistake, it implemented the same across the

board or to all its employees. After realizing its mistake, it stopped integrating the COLA to the
basic pay of the workers who were earning above the minimum wage.

NLRCs Ruling:
Out of 11 issues raised, 8 were decided in its favor; 2 (Denial of paternity leave benefit and
discrimination of union members) were decided in favor of petitioner; while issue in visitors free
access to company premises was deemed settled during the mandatory conference.
CAs Ruling
NLRCs Ruling were Affirmed. In the issue of Non-implementation of COLA, it pointed
out that there was no ambiguity or doubt as to who were covered by the wage order. Petitioner,
therefore, may not invoke error or mistake in extending the COLA to all employees and such act
can only be construed as as a voluntary act on the part of the employer.
Issue: W/N petitioners should continue to implement COLA to non-minimum wage earners.
Held:
No. the SC dismissed the claim for implementation of Wage Order Nos. RBIII-10 and 11 to
the employees who are not minimum wage earners.
Diminution of benefits is the unilateral withdrawal by the employer of benefits already
enjoyed by the employees. There is diminution of benefits when it is shown that:
(1) the grant or benefit is founded on a policy or has ripened into a practice over a long period of
time;
(2) the practice is consistent and deliberate;
(3) the practice is not due to error in the construction or application of a doubtful or difficult
question of law; and
(4) the diminution or discontinuance is done unilaterally by the employer.
The fact that the practice should have been practiced over a long period of time, whereas in
this case, implementation of COLA only lasted for less than a year. Additionally, it must not have
been due to error in the construction or application of a doubtful or difficult question of law.
Respondent failed to prove repetitive conduct that might constitute evidence of the practice.

Netlink Computer Inc. v. Eric Delmo

Facts:
On November 3, 1991, Netlink hired Delmo as account manager tasked to canvass and
source clients and convince them to purchase the products and services of Netlink. Delmo worked
in the field most of the time. He and his fellow account managers were not required to accomplish
time cards to record their personal presence in the office of Netlink. He was able to generate sales
worth P35,000,000.00, more or less, from which he earned commissions amounting to P993,558.89
and US$7,588.30. He then requested payment of his commissions, but Netlink refused and only

gave him partial cash advances chargeable to his commissions. In order to force him to resign,
Netlink issued several memoranda detailing his supposed infractions of the companys attendance
policy. Thereafter, Delmo was shocked when he was refused entry into the company premises by
the security guard pursuant to a memorandum to that effect. His personal belongings were still
inside the company premises and he sought their return to him. This incident prompted Delmo to
file a complaint for illegal dismissal.
Labor Arbiter ruled that Delmo was illegally and unjustly dismissed by the respondent.
However, upon appeal to NLRC, it ruled that there is a valid and just causes for the termination of
Delmos employment however, the respondent company failed to observe procedural due process.
In other arguments of the petitioner, CA ruled that Nettling failed to refute by evidence that
Delmo is not entitled to the commissions payable in US dollars. Neither is there any reason that thee
computation of commissions must be based at the time of sale.
Issue: W/N the payment of the commissions should be in dollars
Held:
Yes. SC affirmed the ruling of CA.
As a general rule, all obligations shall be paid in Philippine currency. However, contracting
parties may stipulate that foreign currencies may be used for settling obligations.
There was no written contract between Netlink and Delmo stipulating that the latters
commissions would be paid in US dollars. The absence of the contractual stipulation
notwithstanding, Netlink was still liable to pay Delmo in US dollars because the practice of paying
its sales agents in US dollars for their US dollar-denominatedsales had become a company policy.
The principle of non-diminution of benefits, which has been incorporated in Article 10013
of the Labor Code, forbade Netlink from unilaterally reducing, diminishing, discontinuing or
eliminating the practice. Verily, the phrase "supplements, or other employee benefits" in Article 100
is construed to mean the compensation and privileges received by an employee aside from regular
salaries or wages.
With the payment of US dollar commissions having ripened into a company practice, there
is no way that the commissions due to Delmo were to be paid in US dollars or their equivalent in
Philippine currency determined at the time of the sales. To rule otherwise would be to cause an
unjust diminution of the commissions due and owing to Delmo.